We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Macroeconomic and bank-specific factors on non-performing loan: evidence from an emerging economy.
- Authors
ANNAS, Mohammad; HUMAIROH, Humairoh; ENDRI, Endri
- Abstract
Macroeconomic conditions and banking performance influenced lending in emerging countries, including Indonesia. The problem that often occurs is high non-performing loans (NPL) which hurt banking performance. This study investigates the effect of macroeconomic and bank-specific variables on NPLs in the banking sector listed on the Indonesia Stock Exchange during the 2017-2021 period. The number of banks selected as the research sample was 32. The method used for data analysis was a panel data regression model. Empirical findings find that Interest Rates (IR), World Oil Prices (WOP), and Operating Expenses and Operating Income (BOPO) have a positive effect on NPL. In contrast, Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), and Inflation (INF)) have a negative effect. The Loan Deposits Ratio (LDR) factor does not impact Bank NPLs. Macroeconomic variables have a more substantial impact on NPL than bank-specific factors. Therefore, bank management needs to project and consider changes in macroeconomic variables, especially IR in lending, to maintain NPLs. For investors interested in buying banking stocks, market risk factors reflected in IR, INF, and OP are considered in investment decisions.
- Subjects
INDONESIA; NONPERFORMING loans; SPREAD (Finance); EMERGING markets; BANKING industry; BANK management; LOANS; INVESTOR protection
- Publication
Quality - Access to Success, 2024, Vol 25, Issue 199, p155
- ISSN
1582-2559
- Publication type
Article
- DOI
10.47750/QAS/25.199.17